Sugar Cane Growing in Australia Industry Market Research Report Now Updated by IBISWorld

Increased sugar consumption across many developing economies and the depreciation of the Australian dollar is expected to aid sugar exports. For these reasons, industry research firm IBISWorld has updated its report on the Sugar Cane Growing industry in Australia.

IBISWorld Market Research

The depreciation of the Australian dollar will aid sugar exports.

Melbourne, Australia (PRWEB) May 31, 2014

Over the five years through 2013-14, Australian sugar cane farmers have battled adverse growing conditions caused by extreme weather patterns, volatile commodity prices and fluctuations in global sugar production. IBISWorld industry analyst Brooke Tonkin states, “Prolonged drought conditions, flooding and cyclones have damaged or wiped out huge portions of Australia's sugar cane crop. Consequently, industry revenue has displayed extreme volatility over the period.” Absolute changes in revenue have ranged from almost 35.0% growth to declines of close to 30.0%. Overall, industry revenue is expected to fall at an annualised 2.2% over the five years through 2013-14 to $1.0 billion. The industry's woes are expected to continue over 2013-14. The forecast rise in global sugar production is expected to keep sugar prices low. Furthermore, Australian production in 2013-14 will be hindered by the damage caused by tropical cyclone Ita in April 2014. The cyclone is estimated to have affected up to 90.0% of sugar cane crops in key growing regions in northern Queensland, only a few months out from the earliest harvest. These factors will contribute to the forecast decline in revenue of 25.4% in 2013-14.

Prospects for the Sugar Cane Growing industry are expected to improve over the next five years. According to Tonkin, “An expected rise in sugar consumption across many developing economies is forecast to drive demand for sugar cane growers, and the forecast depreciation in the Australian dollar will support sugar exports.” Furthermore, increasing demand for alternative fuel sources is anticipated to support industry growth and continue to open up additional revenue channels for the industry. However, the industry will continue to be susceptible to external factors. The Bureau of Meteorology has signalled the likely return of the El Nino effect in 2014. El Nino typically causes low rainfall over eastern Australia – a key growing region for the industry. Furthermore, Wilmar Sugar has announced plans to create a second export supply chain for the industry in 2017. This has been met with concerns from growers that a price war will erupt between the two export bodies. These factors have the potential to inhibit industry growth over the next five years.

The Sugar Cane Growing industry displays a low level of market share concentration. The industry is dominated by small- to medium-sized farms, which is typical of the Agriculture subdivision. Industry concentration is forecast to gradually increase over the next five years. Smaller, less profitable growers will continue to exit the industry and larger farms will expand their production area. Additionally, growing interest in overseas agribusiness firms will further add to industry concentration over the next decade. Currently, the industry’s only major player is Finasucre Investments (Australia). For more information, visit IBISWorld’s Sugar Cane Growing report in Australia industry page.

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.